Bauer's magazine cull allows Mercury to scrap global licensing deals

The decision to permanently shut some of Australia's best-known magazine titles like Elle, Harper's Bazaar, Men's Health and Women's Health enabled Bauer Media's new owners to avoid re-signing long-term licensing deals with international publishing giants.

Bauer Media's new owner Mercury Capital told staff last week that it would permanently shut eight magazines while chief executive Brendon Hill and chief financial officer Andrew Stedwell were quietly removed as the company's officeholders - otherwise known as directors of the business - and replaced with key executives from the private equity firm.

Bauer Media's new owners Mercury Capital permanently shut eight magazines last week. Credit: Dominic Lorrimer

The titles, which also include OK!, NW and InStyle, were temporarily suspended in May, but Mercury decided to close them down permanently, linking the decision to social-distancing restrictions and significant declines in advertising spending caused by the coronavirus pandemic.

But Mercury's decision to shut the magazines was, at least in part, based on the imminent expiry of multi-year licensing deals Bauer had in place. Multiple industry sources who spoke on the condition of anonymity confirmed that at least four of the eight magazine titles axed last week had contracts that expired at the end of the year.

As flagged in The Sydney Morning Herald and The Age on Saturday, Harper's Bazaar had just five months left on its existing contract. But sources said Bauer's licences for Men's Health and Women's Health, which are licensed by the wealthy Hearst Family that also owns Harper's Bazaar, were also expected to expire later this year. The brands were inherited by Bauer went it bought Seven West Media's magazine arm Pacific Magazines for $40 million earlier this year.

Bauer Media signed a new seven-year deal with Elle, which is licensed by Hearst and owned by Lagardere, but there was a 12-month loophole in the contract allowing the local publisher to exit the deal, which was signed last October. The decision to axe NW is also considered straight-forward, as the magazine had no licensing deal in place and was launched by Australian Consolidated Press, which is now known as Bauer Media. Good Health magazine had not had local staff since 2017 and was being published by Bauer New Zealand. A spokeswoman declined to comment.

Some consider last week's closures as detrimental to the industry. While most of the brands closed were loss-making, industry insiders have indicated that Harper's Bazaar and Elle made Bauer popular among luxury advertisers and that removal of these brands - which do not have the same advertisers other magazine titles like Marie Claire and News Corp's Vogue Australia - will make them rethink where they allocate media spend altogether.

Meanwhile, documents filed to ASIC late on Friday revealed three new officeholders for Bauer Australia - Mercury's Clark Perkins, Ben Hawter and Joshua Constantinis - while Mr Hill and Mr Stedwell were removed. The publisher is expected to be renamed in the next month, but is unclear whether more titles will be axed as Mercury cements its strategy and management plans.

There is intense industry speculation over Mr Hill's future with the company, who has been in his role for just over 12 months. The Herald and The Age reported earlier this week that Mercury has been searching for alternatives to Mr Hill, but a Bauer spokeswoman said that he would remain with the business.